Tigerair Records Losses in 1Q 2014

Total revenue declined by 28.4% to $169.0 million in 1QFY15, while total expenses fell 23.5% to $185.4 million year-on-year. The contraction is mainly due to the exclusion of Tigerair Australia from the Group's results, as the airline ceased to be a subsidiary from 8 July 2013.

Loss after tax widened to $65.2 million compared to $32.8 million a year ago. During the quarter, share of loss in P.T. Mandala Airlines ("Mandala") amounted to $35.3 million. In addition, the Group recorded a $14.6 million provision for Mandala's shutdown costs as the airline ceased operations from 1 July 2014.

Mr Lee Lik Hsin, Group CEO said, "Despite the competitive operating conditions faced by Tigerair Singapore, our first quarter results showed a slight improvement over the last quarter. The financial performance was weighed down by share of loss from Mandala, and shutdown costs in relation to the cessation of operations in Indonesia. With the cessation, the Group will no longer be exposed to loss-making Mandala."

Operations Review (1QFY15)

Tigerair Singapore recorded an operating loss of $19.8 million for the quarter compared to an operating profit of $5.9 million a year ago. This was nevertheless an improvement over the operating loss of $29.4 million recorded in the quarter ended 31 March 2014.

Tigerair Singapore's revenue grew by 3.2% to $166.0 million, on the back of higher capacity (14.8%) and stronger load factor (0.8 percentage point), partially offset by lower yields (-11.5%). Expenses went up by 19.9% to $185.8 million due to increased capacity and higher unit cost (+4.5%).

As the Group has capped its share of loss to its net investment in Tigerair Australia, it did not recognise its share of loss from Tigerair Australia during the quarter. Currently, the airline has a fleet of 13 aircraft and its network covers 14 domestic destinations.

Outlook

Tigerair Singapore continues to operate in a challenging environment due to persistent oversupply of capacity in the region. The cessation of operations by Mandala has led to the return of four aircraft to the Group, even as plans for the grounding of eight other aircraft in FY15 are being executed. The Group will seek to place out the surplus aircraft.

The Group continues to focus on cost discipline, rationalising its network and improving operational efficiency.